financial modeling for startups

Startups: Prevent failure !

by financial modeling!Bryan’s talk as a Founder’s Institute Mentor

Hi. I am… Bryan Starbuck Former CEO & Founder of TalentSpring (Acquired in 2010) Currently: CTO at Crystal Commerce BryanStarbuck@hotmail.com

Here is the simple rectangle test

Width

Width =

Hei

ght

Height =

Depth =

# of Customers

Price OPTIONAL: # of Units per

Customer

Example: Selling to “Project Managers in the USA”

Our price is $19 per year

204,760 project managers

Example: Selling to “Project Managers in the USA”

204,760 $19 /per year

$3.8 million / year

Maximum revenue (and selling to EVERY product manager)

Model revenue early in order to completely change your pricing model to form an

ideal business model

Image: @5imon

Investors start off pessimistic

Inte

rest

Start Make this happen

Low

High

Image: @Theodore Scott

This is what investors expect

A company targeting a

$40m to $80m year business model

Image: @Theodore Scott

95 of 100 companies go after too small of a market

Image: @Theodore Scott

This is what they want

Able to reach > $100m rev for Angels. VCs want > $400m or > $800m

Focus on WOWing these 4:!There is a REAL & significant problem for the customer!1!

2!

3!

4!

This company has a real solution. !No other solution exists in the market!

People will pay !(this company’s prices)!

This is a HUGE market!

Now switching to excel

Now I’ll show deep financial modeling…

THE END!!

Q & A!